<Page>

                                   FORM 10-QSB



                  Quarterly Report Under Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

                 For the quarterly period ended January 31, 2002

                           Commission File No. 1-8125


                                  TOROTEL, INC.
        (Exact name of small business issuer as specified in its charter)


           MISSOURI                                    44-0610086
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)


                13402 SOUTH 71 HIGHWAY, GRANDVIEW, MISSOURI 64030
                    (Address of principal executive offices)

                                 (816) 761-6314
                           (Issuer's telephone number)


                                      NONE
              (Former name, former address and former fiscal year,
                          if change since last report)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months and (2) has been
subject to such filing requirements for the past 90 days.

                                Yes X      No
                                   ---         ---

As of March 5, 2002, there were 2,811,590 shares of Common Stock, $.01 Par
Value, outstanding.


<Page>

                        TOROTEL, INC. AND SUBSIDIARIES



                                    INDEX

<Table>
<S>        <C>                                                            <C>
PART I.    FINANCIAL INFORMATION

Item 1.   Financial Statements

     Consolidated Balance Sheet as of January 31, 2002                      1

     Consolidated Statements of Operations for the nine months
          ended January 31, 2002 and 2001                                   2

     Consolidated Statements of Operations for the three months
          ended January 31, 2002 and 2001                                   3

     Consolidated Statements of Cash Flows for the nine months
          ended January 31, 2002 and 2001                                   4

     Notes to Consolidated Financial Statements                             5

Item 2.   Management's Discussion and Analysis or Plan of Operation        11



PART II.   OTHER INFORMATION

Item 1.   Legal Proceedings                                                14

Item 4.   Submission of Matters to a Vote of Security Holders              14

Item 6.   Exhibits and Reports on Form 8-K                                 14



SIGNATURES                                                                 15

</Table>

<Page>


PART I.    FINANCIAL INFORMATION


Item 1.    Financial Statements

CONSOLIDATED BALANCE SHEET (Unaudited)
As of January 31, 2002

<Table>
<Caption>

ASSETS

Current assets:
<S>                                                                <C>
     Cash                                                          $    513,000
     Accounts receivable, net (Note 5)                                  419,000
     Current maturity of note receivable (Note 11)                      158,000
     Inventories (Notes 3 and 5)                                        214,000
     Prepaid expenses and other current assets                           26,000
                                                                   ------------
                                                                      1,330,000

Property, plant and equipment, net (Note 5)                             304,000

Note receivable (Note 11)                                                41,000

Other assets                                                             11,000
                                                                   ------------

                                                                   $  1,686,000
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current maturities of long-term debt (Notes 5 and 11)         $    143,000
     Trade accounts payable (Note 11)                                   678,000
     Accrued liabilities (Note 11)                                      202,000
                                                                   ------------
                                                                      1,023,000

Long-term debt, less current maturities (Notes 5 and 11)                429,000

Stockholders' equity (Notes 6, 7, and 8):
     Common stock, at par value                                          29,000
     Capital in excess of par value                                  10,085,000
     Accumulated deficit                                             (9,675,000)
                                                                   ------------
                                                                        439,000
     Less treasury stock, at cost                                       205,000
                                                                   ------------
                                                                        234,000
                                                                   ------------
                                                                   $  1,686,000
                                                                   ============
</Table>

         The accompanying notes are an integral part of this statement.



                                        1
<Page>

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended January 31,

<Table>
<Caption>

                                                        2002             2001
                                                    -----------      -----------
<S>                                                 <C>              <C>
Net sales                                           $ 2,879,000      $ 2,537,000
Cost of goods sold                                    1,666,000        1,585,000
                                                    -----------      -----------

     Gross profit                                     1,213,000          952,000

Operating expenses:
     Engineering                                        139,000          127,000
     Selling, general and administrative                613,000          581,000
                                                    -----------      -----------
                                                        752,000          708,000
                                                    -----------      -----------

     Earnings from operations                           461,000          244,000

Other expense (income):
     Interest expense                                    38,000           80,000
     Interest income                                    (16,000)         (30,000)
     Other, net                                            --             (3,000)
                                                    -----------      -----------
                                                         22,000           47,000
                                                    -----------      -----------

     Earnings before provision for income taxes
           and extraordinary item                       439,000          197,000

Provision for income taxes (Note 4)                        --               --
                                                    -----------      -----------
     Earnings before extraordinary item                 439,000          197,000
                                                    ===========      ===========

Extraordinary item (Note 9):
      Gain on settlements of debt, less
        applicable taxes of $3,000                      466,000             --
                                                    -----------      -----------
Net earnings                                        $   905,000      $   197,000
                                                    ===========      ===========


Basic earnings per share (Note 6):
      Earnings before extraordinary item            $       .16      $       .07
      Extraordinary item                                    .16             --
                                                    -----------      -----------
                                                    $       .32      $       .07
                                                    ===========      ===========

Diluted earnings per share (Note 6):
      Earnings before extraordinary item            $       .16      $       .07
      Extraordinary item                                    .16             --
                                                    -----------      -----------
                                                    $       .32      $       .07
                                                    ===========      ===========
</Table>

        The accompanying notes are an integral part of these statements.


                                        2
<Page>

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended January 31,

<Table>
<Caption>
                                                        2002             2001
                                                    -----------      -----------
<S>                                                 <C>              <C>
Net sales                                           $   917,000      $   842,000
Cost of goods sold                                      559,000          508,000
                                                    -----------      -----------

     Gross profit                                       358,000          334,000

Operating expenses:
     Engineering                                         47,000           43,000
     Selling, general and administrative                200,000          194,000
                                                    -----------      -----------

                                                        247,000          237,000
                                                    -----------      -----------

     Earnings from operations                           111,000           97,000

Other expense (income):
     Interest expense                                    13,000           26,000
     Interest income                                     (5,000)         (12,000)
     Other, net                                            --             (1,000)
                                                    -----------      -----------
                                                          8,000           13,000
                                                    -----------      -----------

     Earnings before provision for income taxes
           and extraordinary item                       103,000           84,000

Provision for income taxes (Note 4)                        --               --
                                                    -----------      -----------

     Earnings before extraordinary item                 103,000           84,000

Extraordinary item (Note 9):
     Gain on settlement of debt, less applicable
           taxes of $3,000                               28,000             --
                                                    -----------      -----------

Net earnings                                        $   131,000      $    84,000
                                                    ===========      ===========


Basic earnings per share (Note 6):
      Earnings before extraordinary item            $       .04      $       .03
      Extraordinary item                                    .01             --
                                                    -----------      -----------
                                                    $       .05      $       .03
                                                    ===========      ===========

Diluted earnings per share (Note 6):
      Earnings before extraordinary item            $       .04      $       .03
      Extraordinary item                                    .01             --
                                                    -----------      -----------
                                                    $       .05      $       .03
                                                    ===========      ===========
</Table>

        The accompanying notes are an integral part of these statements.


                                        3
<Page>

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended January 31,

<Table>
<Caption>
                                                                                                        2002                 2001
                                                                                                     ---------            ---------
Cash flows from operating activities:
<S>                                                                                                  <C>                  <C>
     Net earnings                                                                                    $ 905,000            $ 197,000
     Adjustments to reconcile net earnings to
         net cash provided by operations:
           Gain on settlements of debt                                                                (466,000)                --
           Depreciation and amortization                                                                39,000               60,000
           Increase (decrease) in cash flows from operations resulting from
               changes in:
                Accounts receivable                                                                    (14,000)              48,000
                Inventories                                                                             50,000              (67,000)
                Prepaid expenses and other assets                                                      (22,000)             (21,000)
                Trade accounts payable                                                                 (73,000)             (50,000)
                Accrued liabilities                                                                    (68,000)             (35,000)
                                                                                                     ---------            ---------

Net cash provided by operating activities                                                              351,000              132,000
                                                                                                     ---------            ---------

Cash flows from investing activities:
     Capital expenditures                                                                              (21,000)                --
     Proceeds from note receivable                                                                     110,000               97,000
                                                                                                     ---------            ---------

     Net cash provided by investing activities                                                          89,000               97,000
                                                                                                     ---------            ---------

Cash flows from financing activities:
     Proceeds from long-term debt                                                                       75,000                 --
     Principal payments on long-term debt                                                             (168,000)            (154,000)
     Payments on capital lease obligations                                                              (5,000)              (9,000)
     Note and interest payable to former officer                                                      (150,000)              31,000
                                                                                                     ---------            ---------

Net cash provided by (used in) financing activities                                                   (248,000)            (132,000)
                                                                                                     ---------            ---------

Net increase in cash                                                                                   192,000               97,000
Cash at beginning of period                                                                            321,000               95,000
                                                                                                     ---------            ---------

Cash at end of period                                                                                $ 513,000            $ 192,000
                                                                                                     =========            =========


Supplemental Disclosures of Cash Flow Information Cash paid during the period
     for:
         Interest                                                                                    $  38,000            $  46,000
         Income Taxes                                                                                $   3,000            $    --
</Table>

        The accompanying notes are an integral part of these statements.


                                        4
<Page>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 1 - Basis of Presentation

      Torotel specializes in the custom design and manufacture of a wide variety
of precision magnetic components, consisting of transformers, inductors,
reactors, chokes and toroidal coils. Approximately 98% of Torotel's sales are
derived from domestic customers. The accompanying unaudited consolidated
financial statements reflect the normal recurring adjustments which are, in the
opinion of management, necessary to present fairly Torotel's financial position
at January 31, 2002, and the results of operations for the three and nine months
ended January 31, 2002.

      The financial statements contained herein should be read in conjunction
with Torotel's financial statements and related notes filed on Form 10-KSB for
the year ended April 30, 2001.


Note 2 - Future Liquidity

      The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplate continuation of Torotel as a going concern. At
January 31, 2002, Torotel had working capital of $307,000, compared to negative
working capital of $120,000, $734,000 and $921,000 at April 30, 2001, 2000 and
1999, respectively. Torotel has been profitable in each of the past eight
quarters, and in nine of the last ten. Furthermore, continuing operations have
provided cash in the last four years, and based on its current forecasts,
management believes operating cash sufficient for at least one year will be
generated. In addition, management believes the outstanding liabilities
associated with a terminated merger in fiscal 1999 and the trade debt from a
discontinued subsidiary (see Note 11 of Notes to Consolidated Financial
Statements) will be settled at amounts significantly lower than that carried on
the balance sheet. Management continues to evaluate Torotel's liquidity position
and believes it has taken all necessary steps to provide Torotel with adequate
liquidity to continue in existence.


Note 3 - Inventories

      The components of inventories are summarized as follows:

           Raw materials                               $    26,000
           Work in process                                 160,000
           Finished goods                                   28,000
                                                       -----------
                                                       $   214,000
                                                       ===========


Note 4 - Income Taxes

     Torotel has net operating loss carryforwards available as benefits to
reduce future income taxes, subject


                                        5
<Page>

to applicable limitations. These operating loss carryforwards expire in various
amounts in the years 2001 through 2014.

      The difference between the financial and tax bases of assets and
liabilities is determined annually. Deferred income taxes and liabilities are
computed for those differences that have future tax consequences using the
currently enacted tax laws and rates that apply to the periods in which they are
expected to affect taxable income. Valuation allowances are established, if
necessary, to reduce the deferred tax asset to the amount that will, more likely
than not, be realized. Income tax expense is the current tax payable or
refundable for the period plus or minus the net change in the deferred tax
assets or liabilities.

      The following table summarizes the components of the net deferred tax
asset:

           Net operating loss carryforwards           $ 2,160,000
           Inventory valuation reserve                    190,000
           Tax credit carryforwards                        20,000
           Other                                           43,000
                                                      -----------
                                                        2,413,000
           Less valuation allowance                     2,413,000
                                                      -----------
                                                      $      --
                                                      ===========

Note 5 - Financing Agreements

      On September 17, 2001, Torotel entered into a $75,000 promissory note with
Vista Bank, N.A. Under the terms of the note, the outstanding balance bears
interest at an initial rate of 6.5% per annum and will fluctuate daily at 1%
over the bank's base lending rate. The note requires monthly principal and
interest payments, with a first payment of $2,083.33 and 35 payments of
$2,326.47. The note has a maturity date of September 17, 2004 and is
collateralized by trade accounts receivable, inventories and equipment. As of
January 31, 2002, the outstanding principal balance was $67,000 and the
effective interest rate was 5.75%. Proceeds of the loan were used to help pay
off the note payable to a former officer (see Note 10 of Notes to Consolidated
Financial Statements).


Note 6 - Earnings Per Share

      Statement of Financial Accounting Standards (SFAS) No. 128, EARNINGS PER
SHARE, requires dual presentation of basic and diluted EPS on the face of the
statement of earnings regardless of whether basic and diluted EPS are the same;
and requires a reconciliation of the numerator and denominator used in computing
basic and diluted EPS. Basic EPS excludes dilution and is computed by dividing
earnings available to common stockholders by the weighted average number of
common shares outstanding for the period. Diluted EPS is computed similarly to
fully diluted EPS pursuant to APB Opinion 15. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity. Pursuant to SFAS
No. 128, the basic and diluted loss per common share were computed as follows:



                                        6


<Page>

<Table>
<Caption>

      YEAR-TO-DATE EPS CALCULATIONS                           2002             2001
                                                           ----------       ----------
<S>                                                        <C>              <C>
         Earnings before extraordinary item                $  439,000       $  197,000
         Weighted average common shares outstanding         2,811,590        2,811,590
         Incremental shares                                     1,517            --

         Basic earnings per share                          $      .16       $      .07
         Diluted earnings per share                        $      .16       $      .07
</Table>

         No incremental shares are included in the EPS calculations for 2001
         because the market price of Torotel's common stock is lower than the
         exercise price of the stock equivalents under contract.

<Table>
<Caption>
      QUARTERLY EPS CALCULATIONS                               2002             2001
                                                            ----------       ----------
<S>                                                         <C>              <C>
         Earnings before extraordinary item                 $  103,000       $   84,000
         Weighted average common shares outstanding          2,811,590        2,811,590
         Incremental shares                                     17,934            --

         Basic earnings per share                           $      .04       $      .03
         Diluted earnings per share                         $      .04       $      .03

         No incremental shares are included in the EPS calculations for 2001
         because the market price of Torotel's common stock is lower than the
         exercise price of the stock equivalents under contract.
</Table>

Note 7 - Employee Stock Options

      In accordance with the Incentive Compensation Plan approved by
stockholders on September 19, 1994, Torotel reserved 400,000 common shares for
issuance to key employees pursuant to the exercise of incentive and
non-qualified stock options granted prior to June 20, 2004. The options are
accounted for under APB Opinion 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES,
and related Interpretations. The incentive stock options have a term of five
years when issued and vest 50% per year during the first two years. The
non-qualified stock options have a term of ten years when issued and vest 25%
per year during the first four years. The exercise price of each option equals
the market price of Torotel's common stock on the date of grant. Accordingly, no
compensation cost will be recognized upon the grant of any options. Had
compensation cost for the Plan been determined based on the fair value of the
options at the grant dates consistent with the method of Statement of Financial
Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, the
Company's operating results would have been reduced to the pro forma amounts
indicated below.

<Table>
<Caption>
                 YEAR-TO-DATE                                                  2002          2001
                                                                            ---------     ----------

<S>                                                                         <C>           <C>
           Earnings before extraordinary item         As Reported           $ 439,000     $  197,000
                                                      Pro Forma             $ 435,000     $  197,000

           Basic earnings per share                   As Reported           $     .16     $      .07
                                                      Pro Forma             $     .15     $      .07

           Diluted earnings per share                 As Reported           $     .16     $      .07
                                                      Pro Forma             $     .15     $      .07

</Table>


                                        7
<Page>

<Table>
<Caption>
                 QUARTERLY                                                     2002          2001
                                                                            ---------     ----------

<S>                                                                         <C>           <C>
           Earnings before extraordinary item         As Reported           $ 103,000     $  197,000
                                                      Pro Forma             $  99,000     $  197,000

           Basic earnings per share                   As Reported           $     .04     $      .03
                                                      Pro Forma             $     .13     $      .03

           Diluted earnings per share                 As Reported           $     .04     $      .03
                                                      Pro Forma             $     .03     $      .03
</Table>

      The fair value of the incentive stock options granted was estimated on the
date of grant using the Black-Scholes options-pricing model. The fair value of
the options was determined using the following weighted average assumptions: no
dividend payments over the life of the options; expected volatility of 551.0%;
risk-free interest rate of 3.50%; and expected life of five years.

      Stock option transactions under the 1994 Incentive Compensation Plan for
each period are summarized as follows:

<Table>
<Caption>
                                                                    2002                             2001
                                                       ----------------------------      ---------------------------
                                                        Weighted                          Weighted
                                                         Shares            Average         Shares         Average
                                                          Under            Exercise         Under         Exercise
                                                         Option             Price          Option           Price
                                                       ----------         ----------     ----------        ---------
<S>                                                    <C>                <C>             <C>              <C>
            Outstanding at beginning of period             --                --              --              --
            Granted                                      40,000             $   .37          --              --
            Exercised                                      --                --              --              --
            Forfeited                                      --                --              --              --
                                                        --------                          --------
            Outstanding at end of period                 40,000             $   .37          --              --
                                                        ========                          =========
            Options exercisable at end of period           --                --              --              --
            Weighted average fair value of
                 options granted during the year                            $   .37                          --
</Table>

The following information applies to warrants outstanding at January 31, 2002:

           Number outstanding                                40,000
           Range of exercise prices                          $  .37
           Weighted average exercise price                   $  .37
           Weighted average remaining contractual life         4.75 yrs.


Note 8 - Stock Warrants

      Pursuant to a settlement that ended a class action alleging racial
discrimination in hiring by Torotel Products, Inc., Torotel agreed to issue a
warrant certificate to the Torotel Settlement Fund to purchase 100,000 shares of
Torotel, Inc. common stock at $.75 per share. The warrant is 100% vested upon
issuance and cannot be exercised until the market price of Torotel's common
stock reaches $2.00 per share. The warrant expires on May 4, 2003.


                                        8
<Page>

      The $33,000 fair value of the warrant was estimated on the date of grant
using the Black-Scholes options-pricing model using the following weighted
average assumptions: no dividend payments over the life of the warrant; expected
volatility of 75.9%; risk-free interest rate of 5.8%; and expected life of two
years.

      Stock warrant transactions for each period are summarized as follows:

<Table>
<Caption>
                                                                    2002                             2001
                                                       ----------------------------      ---------------------------
                                                        Weighted                          Weighted
                                                         Shares            Average         Shares         Average
                                                          Under            Exercise         Under         Exercise
                                                         Option             Price          Option           Price
                                                       ----------         ----------     ----------        ---------
<S>                                                    <C>                <C>             <C>              <C>
            Outstanding at beginning of period          100,000             $   .75        100,000           $   .75
            Granted                                        --                --              --                --
            Exercised                                      --                --              --                --
            Forfeited                                      --                --              --                --
                                                        --------                          --------
            Outstanding at end of period                100,000             $   .75        100,000            $  .75
                                                        ========                          =========
            Options exercisable at end of period           --                --              --                --
            Weighted average fair value of
                 options granted during the year                             --                                --
</Table>

The following information applies to warrants outstanding at January 31, 2002:

           Number outstanding                                100,000
           Range of exercise prices                          $  .75
           Weighted average exercise price                   $  .75
           Weighted average remaining contractual life         1.25 yrs.


Note 9 - Extraordinary Item

      For the nine months ended January 31, 2002, the extraordinary item as
presented in the accompanying consolidated statements of operations includes a
net gain of $466,000 resulting from the settlement of old liabilities at amounts
lower than originally recorded (see Note 10 of Notes to Consolidated Financial
Statements).

      For the three months ended January 31, 2002, the extraordinary item as
presented in the accompanying consolidated statements of operations includes a
net gain of $28,000 resulting from the settlement of an old liability at an
amount lower than originally recorded.


Note 10 - Note Payable to Former Officer

      On May 6, 1997, Torotel Products, Inc. was accepted into the Voluntary
Disclosure Program of the United States Department of Defense, resulting from
its failure to perform some required "thermal shock" testing as frequently as
required, and inaccurately certifying that all required testing had been
performed. On June 27, 2000, Torotel Products entered into a Release and
Settlement Agreement with the United States of America. Pursuant to the
agreement, Torotel Products agreed to pay an aggregate total of $100,000 over a


                                        9
<Page>

nineteen-month period. The aggregate legal fees associated with the testing
deficiencies amounted to $292,000 during the course of the investigation.

      Torotel believed that certain of its former officers may have been
responsible for the misconduct related to the test failures. In February 1997,
Torotel suspended all principal and interest payments due under a note payable
to a former president and chief executive officer of Torotel. As of April 30,
2001, the aggregate amount due under the note was $561,000, which consisted of
the outstanding principal of $384,000 plus accrued interest of $177,000.

      In consideration of a payment of $150,000, the former executive agreed to
forgive the remaining debt balance of $234,000 and all accrued unpaid interest
relating to the note. In return, Torotel has agreed not to pursue any claims
against the former executive for costs and penalties incurred by Torotel as a
result of the thermal shock testing investigation. Torotel borrowed $75,000 to
help fund this payment (see Note 5 of Notes to Consolidated Financial
Statements).

      As a result of this settlement, Torotel recorded an extraordinary gain to
net earnings of $411,000 in the second quarter ending October 31, 2001.


Note 11 - Discontinued Subsidiary

      The operations of East Coast Holdings, Inc. (formerly named OPT
Industries, Inc.), a wholly owned subsidiary of Torotel, were discontinued in
April 1999, and the assets sold to Shared Information Group Management
Associates, L.L.C ("SIGMA"). The remaining assets and liabilities related to
this subsidiary as of January 31, 2002, are included in the accompanying
consolidated balance sheet under the following captions and in the amounts
shown:

     Current maturity of note receivable                     $ 158,000
     Note receivable, less current maturity                  $  41,000
     Current maturities of long-term debt                    $  97,000
     Trade accounts payable                                  $ 386,000
     Accrued liabilities                                     $  82,000
     Long-term debt, less current maturities                 $  25,000



                                       10

<Page>

Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      The following management comments regarding Torotel's results of
operations and outlook should be read in conjunction with the Consolidated
Financial Statements included pursuant to Item 1 of this Quarterly Report. The
discussion and analysis of the results of operations include the operations of
Torotel, Inc. and its subsidiary, Torotel Products, Inc.

NINE MONTHS ENDED JANUARY 31, 2002 VERSUS NINE MONTHS ENDED JANUARY 31, 2001

Net sales increased 13% from $2,537,000 to $2,879,000 because of increased sales
of magnetics products resulting from a higher shippable backlog at the beginning
of the current fiscal year, and higher sales of the potted coil assembly for the
Hellfire II missile system. While net sales have increased, low order bookings
in January 2002 contributed to a 21% drop in Torotel's backlog. Overall order
bookings decreased 30% during the recent quarter and 16% for the nine months
year-to-date. This has impacted Torotel's shippable backlog for the fourth
quarter, which now has management looking at a shipment level similar to the
third quarter. The decline in bookings is a result of the soft market conditions
primarily in the telecommunications and industrial sectors that we serve. While
these sectors will continue to slump in the near-term, Torotel expects to see a
steady level of business from its aerospace markets, and an increase in orders
from the military segment over the next several months. Management remains
optimistic about Torotel's sales outlook as February bookings were significantly
higher, which has positioned the backlog for a strong beginning to fiscal 2003.

      This decline is a result of the soft market conditions primarily in the
telecommunications and industrial sectors served by Torotel. While these sectors
will continue to slump in the near-term, Torotel does expect to see a steady
level of business from its aerospace markets, and an increase in orders from the
military segment over the next several months.

      Gross profit as a percentage of net sales increased nearly 5% because of
increased sales volume and lower material costs associated with the product mix.

      Engineering expenses increased 9% from $127,000 to $139,000 because of
higher payroll costs. Management does not anticipate any significant change in
the present level of engineering expenses.

      Selling, general and administrative (SG&A) expenses increased nearly 6%
from $581,000 to $613,000. The SG&A expenses of Torotel, Inc. increased 9% from
$107,000 to $117,000 primarily because of a $21,000 increase in compensation
costs associated with Torotel's Chairman and CEO. This increase was offset by a
$6,000 decrease in investor relations costs, a $3,000 decrease in professional
fees, and a $2,000 decrease in insurance costs. The SG&A expenses of Torotel
Products increased nearly 5% from $474,000 to $496,000 primarily because of an
$27,000 increase in workers compensation insurance costs due to a dividend
received last year, a $7,000 increase in rental expense from operating leases, a
$4,000 increase in liability insurance costs, and a $2,000 increase in
professional fees. These increases were offset by a $13,000 decrease in
depreciation expense and a $5,000 decrease in sales commissions. Management does
anticipate an increase in the present level of SG&A expenses during the next few
quarters.


                                       11
<Page>

      Interest expense decreased nearly 53%. The interest expense of Torotel,
Inc. decreased 76% from $46,000 to $11,000 because of the settlement reached on
the note payable to a former officer (see Note 10 of Notes to Consolidated
Financial Statements) and a lower principal balance on the guaranteed note with
Vista Bank. The interest expense of Torotel Products decreased nearly 21% from
$34,000 to $27,000 because of lower debt balances.

     Interest income decreased nearly 47% from $30,000 to $16,000 because of a
lower principal balance on the note receivable from SIGMA and the effect of a
higher annual interest rate that was assessed during the first nine months of
fiscal 2001. The higher rate was triggered by late payments on the note.

      Sundry non-operating income decreased because of late payment fees
collected last year pursuant to the terms of the note receivable from SIGMA.

      For the reasons discussed above, the consolidated pretax earnings before
the extraordinary item increased from $197,000 to $439,000. The pretax loss of
Torotel, Inc. decreased from $120,000 to $112,000. The pretax earnings of
Torotel Products increased from $317,000 to $551,000.

THREE MONTHS ENDED JANUARY 31, 2002 VERSUS THREE MONTHS ENDED JANUARY 31, 2001

      Net sales increased 9% from $842,000 to $917,000 because of higher sales
of the potted coil assembly for the Hellfire II missile system. Net sales for
the recent quarter were hindered by lost production time arising from an ice
storm that hit the Midwest in late January.

      Gross profit as a percentage of net sales decreased slightly because of
higher material costs associated with the product mix.

      Engineering expenses increased 9% from $43,000 to $47,000 because of
higher payroll costs. Management does not anticipate any significant change in
the present level of engineering expenses.

      Selling, general and administrative (SG&A) expenses increased 3% from
$194,000 to $200,000. The SG&A expenses of Torotel, Inc. increased 64% from
$28,000 to $46,000 primarily because of a $10,000 increase in compensation costs
associated with Torotel's Chairman and CEO and an $8,000 increase in
professional fees. The SG&A expenses of Torotel Products decreased 7% from
$166,000 to $154,000 because of an $18,000 accrual for incentive compensation
awards in last year's quarter, a $4,000 decrease in costs for utilities, and a
$4,000 decrease in depreciation expense. These decreases were offset by a $9,000
increase in insurance costs resulting from a return premium in the prior year
and a $5,000 increase in computer costs for lifetime software licenses.
Management does anticipate an increase in the present level of SG&A expenses
during the next few quarters.

      Interest expense decreased 50%. The interest expense of Torotel, Inc.
decreased 73% from $15,000 to $4,000 because of the settlement reached on the
note payable to a former officer (see Note 10 of Notes to Consolidated Financial
Statements) and a lower principal balance on the guaranteed note with Vista
Bank. The interest expense of Torotel Products decreased 18% from $11,000 to
$9,000 because of lower debt balances.

      Interest income decreased 58% because of a lower principal balance on the
note receivable from SIGMA and the effect of a higher annual interest rate that
was assessed during last year's quarter. The higher rate was triggered by late
payments on the note.


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<Page>

      Sundry non-operating income decreased because of late fees collected
during last year's quarter pursuant to the terms of the note receivable from
SIGMA.

      For the reasons discussed above, the consolidated pretax earnings
increased from $84,000 to $103,000. The pretax loss of Torotel, Inc. increased
from $30,000 to $45,000. The pretax earnings of Torotel Products increased from
$114,000 to $148,000.

LIQUIDITY AND CAPITAL RESOURCES

      Torotel relies on funds generated internally to meet its normal operating
requirements and to service bank indebtedness. Management continues to evaluate
ways of improving Torotel's liquidity position and funding future investments.

      During the nine months ended January 31, 2002, Torotel's operations
provided $351,000 in cash flow because of operating earnings.

      Investing activities provided $89,000 in cash flow because of $110,000 in
proceeds from the note receivable from SIGMA. Torotel had capital expenditures
of $21,000 during the nine months ended January 31, 2002, and anticipates
additional expenditures of $5,000 during the balance of fiscal 2002.

      Financing activities used $248,000 in cash flow because of decreases in
long-term debt and the payoff of the note payable to former officer.

      Management believes that inflation will have only a minimal effect on
future operations since such effects will be offset by sales price increases
which are not expected to have a significant effect upon demand.

Other

      Except for historical information contained herein, certain of the matters
discussed above are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to the safe harbor
created by that Act. These statements are based on assumptions about a number of
important factors and involve risks and uncertainties that could cause actual
results to be different from what is stated here. These risk factors are:
decreased demand for products, delays in developing new products, expected
orders that do not materialize, loss of key customers, the impact of competition
and price erosion as well as supply and manufacturing constraints, and other
risks and uncertainties.


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<Page>

                           PART II. OTHER INFORMATION


Item 1.    Legal Proceedings

      The remaining liabilities related to a discontinued subsidiary include
trade accounts payable of $386,000 (see Note 11 of Notes to Consolidated
Financial Statements). Several claims have been filed by vendors for collection
of amounts due, and it's possible more could be filed. Since the discontinued
subsidiary's remaining assets have been assigned as collateral for the remaining
bank debt, and most of the remaining proceeds are targeted for unpaid payroll
taxes, this subsidiary has no other source of income to satisfy its trade debt
obligations. This trade debt remains the sole responsibility of the discontinued
subsidiary. Neither Torotel, Inc. or Torotel Products, Inc. has assumed these
obligations. While the claims by vendors may result in judgments against the
discontinued subsidiary, neither Torotel, Inc. or Torotel Products, Inc. intends
to provide any funds to satisfy the judgments.


Item 4.    Submission of Matters to a Vote of Security Holders

      The annual meeting of stockholders was held in Grandview, Missouri, on
Monday, September 17, 2001, to elect a Board of Directors. At the meeting, there
were 2,399,117 shares voting, with nominees needing 1,199,560 shares to be
elected. Stockholders elected the following individuals to a one-year term on
the Board of Directors, with the number of shares voting "FOR" each nominee
indicated.

                      Dale H. Sizemore, Jr.        2,389,401
                      Richard A. Sizemore          2,389,373
                      H. James Serrone             2,370,841



Item 6.   Exhibits and Reports on Form 8-K

     a)    Exhibits -- None
     b)    Reports on Form 8-K -- There were no reports  filed on Form 8-K
           during the three  months  ended  January  31, 2002.


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<Page>


                                   SIGNATURES


      In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


Torotel, Inc.
(Registrant)




Date:   March 5, 2002                         /s/   H. James Serrone
      -----------------                       --------------------------------
                                              H. James Serrone
                                              Vice President of Finance and
                                              Chief Financial Officer




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